Blockchain as a key technology for coopetition — and thus for an economic change
DIGITUS.magazin 1.2020 / An interview with Thomas Müller, spokesman of the evan.network organization
[Read the German version of this article here ]
>>> At least since cryptocurrencies such as Bitcoin or Ethereum became popular, blockchain technology has become a key term in the digital transformation. However, use cases in the economy are still rare. This is mainly because blockchain is not simply a new technology to optimize existing processes. When used “behind closed doors”, it brings few measurable benefits. Rather, the decentralized distributed ledger principle plays out its potential in cross-company transactions, affecting the entire value chain and the business models based on it.
Blockchain models follow a new logic
Even though cryptocurrencies is a topic in itself, the new logics-aspect is clear from the start. This is not simply a question of the digitalization of established processes like it was the case with the introduction of online banking. The revolution of decentralized currencies on the blockchain basis implies that their functionality does not need a bank as intermediary and follows a completely new logic. There was a lot of visionary imagination needed to believe in this change. The same applies to the use of blockchain in coopetition models. It is very interesting to see which companies and industries in Germany have already recognized its potential and which remain reluctant to do so.
In order to successfully implement blockchain projects, first of all, it is essential to gain a comprehensive and, above all, correct understanding of the technology. Unlike a central database, blockchain stores all transactions encrypted on many different servers (distributed ledger principle). This creates a decentralized, unchangeable and tamper-proof data storage.
Cooperative approach completes the technological dimension
Furthermore, blockchain offers the possibility to conclude digital agreements through so-called Smart Contracts, which content is activated automatically when a specified condition occurs. These functionalities make blockchain a suitable digital infrastructure for a much broader use than cryptocurrencies alone. For example, eligible use cases can be found in supply chain management, the Internet of Things, in insurance or the energy sector.
A decentralized technology must also be applied in a decentralized way. To make its potential usable, companies have to amplify two further dimensions to the technological understanding of blockchain: The comprehension of scenarios where the use of blockchain technology makes sense and the suitable approach to implement blockchain-based projects.
Generally, the use of blockchain is particularly worthwhile if:
- real goods are to be digitized and integrated into data-driven business models (digital identities)
- processes and transactions should be fully digitized (end-to-end) without intermediaries
- an unalterable transaction and asset documentation should be created.
However, even if companies do understand the technology and its potential impact, implementing blockchain-based solutions can be difficult. Instead of developing blockchain solutions based on classic entrepreneurial thinking patterns, a new approach — the joint solutions to optimize the cooperation between companies — is required. Moreover, the use of decentralized peer-to-peer technology must be shaped by a cooperative approach.
“Therefore, a new economic mindset emerges as companies work together in cooperative ecosystems”
Platforms have developed into a dominant business model in the digital economy because they can offer products and services of companies to their customers from a single source. In addition to a large selection for customers, this ensures fewer media disruptions and creates trust in the large platform partner. Therefore, platforms are taking on dominant positions in more and more industries, but are also causing growing dependency on the connected players. That is why companies are looking for alternatives that enable them to digitize cross-company processes and offer customers better service. Therefore, in some industries, competitors are creating decentralized cooperation models to respond to the new competition, caused by platforms, and changing customer needs. This new form of cooperation that is called “coopetition” by experts finds the appropriate technological infrastructure in the blockchain. For example, the blockchain-based trust infrastructure evan.network proclaims the “decentralized market economy based on blockchain technology” as a new economic mindset, according to which companies cooperate in so-called cooperative ecosystems.
In an interview with DIGITUS, Thomas Müller, the spokesman of the evan.network organization, explains how this works:
DIGITUS: Mr. Müller, you say that competitors should cooperate to remain competitive and not make themselves dependent on platforms. Why do you think that blockchain is the right technology for creating cross-company solutions?
Thomas Müller: In B2B in particular, we are noticing that many companies are developing digital offers on their own, thus creating isolated solutions. Due to the lack of common standards, it is only possible to combine the services of different providers at great expense — platforms close this gap and are, therefore, very popular with customers. But connecting to a platform also means for companies to become dependent on other players. The decentralized structure of the blockchain, on the other hand, enables companies to work together on an equal footing in cooperative ecosystems. They can deliver the service of a platform without being dependent on a central provider.
DIGITUS: What exactly do you mean by a cooperative ecosystem?
Thomas Müller: In a cooperative ecosystem, the companies involved interact with each other based on a digital trust infrastructure. The members can network their services with other market participants and thus, for example, temporarily access resources of competitors. The bottom line is that they can better meet the customer needs. At the same time, all players retain their independence, their data sovereignty and have the same market opportunities.
DIGITUS: The cooperation of competitors is on an equal footing which brings advantages for everyone — isn’t that a little too optimistic?
Thomas Müller: This objection is not new. But coopetition does not only involve cooperation, but also competition. Every company decides for itself which information is shared with which business partner at what time, and which is not. This way, companies remain independent and retain their autonomy. Moreover, decentralized infrastructures also prevent the kind of information gap or power imbalance that we are familiar with in case of centralized platforms.
DIGITUS: How are such cooperative ecosystems structured? And who ensures trust and transaction security when central instances such as platform operators are missing?
Thomas Müller: Ultimately, the cooperative ecosystem is based on a decentralized trust infrastructure that uses blockchain technology. It is, therefore, decentralized, tamper-proof and enables digital contracts to be concluded. The participating companies, their employees, machines or products receive a tamper-proof and verified digital identity. There, information such as master data or certifications, but also terms of use and digital contracts are stored. On this basis, the participating companies can digitize their business processes and, for example, temporarily integrate resources from other companies into their value creation.
DIGITUS: How does this new form of cooperation emerge and what challenges do you see in creating cooperative ecosystems?
Thomas Müller: So far, we are observing the development of cooperative solutions, especially in industries where cross-company processes already exist but have not yet been digitized. Often, one company takes the initiative and tries to win other companies or associations as its cooperation partners. For success, the benefits of a cooperative solution must be clear to all players from the outset. Thus, the greatest possible openness and participation of all users are essential. Ultimately, an infrastructure that meets the requirements and expectations of all users should be created.
DIGITUS: Is there any practical experience that you can perhaps tell us about?
Thomas Müller: An example can be found with companies, renting out construction and working machines. In this sector, cooperation has always played a major role. To service customer orders, it has long been part of everyday life for rental companies to use the machines of their competitors and partners. However, up to now this has mostly been done over telephone, fax and or email. Location information or status descriptions are exchanged manually.
Within the de:rental initiative, rental companies can now cooperate with manufacturers and ERP systems on the blockchain-based trust infrastructure evan.network. Together, standards for digital identities have been developed, which make the rental objects — from an operating platform to a crawler excavator — digitally available digitally. Providers can access the resources of selected partners and directly integrate them into their rental processes. The nature of the decentralized infrastructure offers providers the possibility to carefully choose which data is shared with which business partner.
DIGITUS: That sounds as if this project has already proven itself…
Thomas Müller: …Yes, indeed. The results are very promising on both sides. Similar to a central platform, customers benefit from binding bookings and access to a cross-company fleet. The advantage for rental companies, when working together in the digital ecosystem, is to retain absolute data sovereignty, and there is no commission to pay to a central platform operator. This solution makes universal rental companies and niche providers equally flexible and thus also provides new sales options in times of economic weakness.
DIGITUS: Mr. Müller, this is all very exciting to read. Certainly, we will hear about a whole string of promising coopetition models in the future. Thank you very much for this interview. <<<
The evan.network is a manufacturer-neutral digital infrastructure that uses blockchain technology to provide a collaborative environment where business partners can work together in a trusted and tamper-proof manner.
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